The receivables management industry deals with the collection of unpaid debt in all sectors of the economy (e.g., health care, student loans, credit cards, and retail). While some creditor entities may try to collect their own unpaid debts, typically the delinquent accounts are turned over to a third party debt collector (or collection agency) to manage the process of collecting the unpaid amounts. Such debt collectors employ various strategies to collect on unpaid accounts, such as making multiple phone calls to the debtor (also referred to herein as the “account holder”) and sending a series of letters to the debtor's house.
Such actions by a collection agency, creditor, or other entity in an attempt to collect on unpaid accounts may be referred to herein as “collection activities”. Examples of collection activities includes making manual and automated telephone calls to the debtor (including telephone calls with pre-recorded messages and telephone calls with live account representatives), sending letters to the debtor, emailing the debtor, texting the debtor, and any of various other communications with the debtor in an attempt to collect on unpaid accounts. However, collection activities may also include actions that do not involve communication with the debtor, such as furnishing data to credit reporting agencies, initiating litigation in the court system to secure judgment, and pursuing garnishment, repossession, or liens. It will be appreciated that the term “collection activities” encompasses, but is not limited to, all of the activities discussed in this paragraph.
Numerous restrictions exist for debt collectors with respect to collection activities that are permissible. These restrictions may relate to any number of different attributes of the account holder, such as the physical residence location of the account holder or the age of the account holder. For example, phone calls to account holders residing in certain states may only be permitted during designated times of the day (e.g., 9 am-5 pm). As another example, the number of calls that may be made to senior citizens may be limited (e.g., no more than two calls to the account holder in one day).
Restrictions on collections activities exist at various levels, including federal and state laws and regulations, non-state restrictions (e.g., restrictions issued for particular geographic regions not limited to states such as zip code or county restrictions from government or other authorities) client-based restrictions, and office policies. Federal restrictions are typically blanket restrictions that apply to all similarly situated account holders regardless of the state or territory in which they live. In addition to federal restrictions, each state also has its own restrictions on collection activities, so activities related to an account holder in one state may be permissible, but the same collection activities in another state may be restricted. For example, it may be permissible to call an account holder in New York at 9 am, while a call to an account holder in West Virginia may not be made until 10 am. On occasion, local collection restrictions are instituted that are non-state restrictions. For example, following emergencies such as natural disasters, collection restrictions may be instituted for individuals living in certain local areas (e.g., restrictions based on zip code). In addition to these governmental restrictions, collection agencies also must be aware of non-governmental restrictions on collection activities, including client-based restrictions (i.e., restrictions based on the collection requirements of a particular creditor) and office-policy restrictions (i.e., restrictions based on the collection policies of the particular debt collection agency).
Managing restrictions is a difficult task for collection agencies. The collection agency must be cognizant of all of the applicable restrictions for each collection activity taken, including all of the applicable federal, state, local, client and office restrictions. Attempting to determine all the applicable restrictions that may apply to a given account holder is not only time consuming, but is uneconomical and increases the cost of each collection. As a result, many collection agencies often commit ignorant violations of restrictions. These violations may result in litigation, fines against the collection agency or loss revenue. At a minimum, violations of restrictions may result in client dissatisfaction or ill-will with consumers in general.
Accordingly, there exists a long felt need for a system to effectively and efficiently receive, manage, implement, and audit restrictions on collections activities for the purposes of improving collection practices. It would be advantageous if such system could increase the effectiveness of collection activities while reducing compliance issues on collections restrictions. It would also be advantageous if such a system could be implemented with relatively little cost to the collection agency and used with existing collection systems.